WHAT THE FED HEAD SAID….Fed chairman Ben Bernanke testified before Congress today and Brad DeLong provides a pithy summary:

Further cuts in the federal funds rate are on the way. Ben Bernanke is talking about how we are in a slow-moving financial crisis of DeLong Type II: one in which large financial institutions are insolvent — “pressure on bank balance sheets” — and in which lower short-term interest rates and a steeper yield curve are a way of providing institutions with the life jackets they need to paddle to shore.

Well, that sure doesn’t sound very optimistic, does it?